SACRAMENTO, Calif. (CN) — After years of rising gas prices, California lawmakers at a special session Thursday afternoon considered possible solutions to the state’s energy woes.
The state Assembly Committee on Petroleum and Gasoline Supply voted 13-2 to move forward on special session Assembly Bill 1, which aims to stabilize and lower overall gas prices for consumers.
If passed, the California Energy Commission could require refineries to store a minimum supply of fuel on hand in case of shortages, which lawmakers claim could temper the fuel price spikes Californians have seen over the last few years.
“This is a common sense solution that has been adopted by developed countries around the world,” said Tai Milder, director of the Division of Petroleum Market Oversight, referring to similar plans already implemented in Australia, Switzerland and Germany.
However, the fuel industry opposes the bill over a provision that would allow the commission to establish criteria for when refineries may shut down for maintenance, a move they say would unnecessarily micromanage the fuel industry, endanger workers and create a fuel shortage that could raise gas prices for consumers.
“We believe the Legislature giving its authority to yet another state agency to raise everyday gas prices on consumers is not a good idea,” said Zachary Leavy, a lobbyist with the Western States Petroleum Association.
The Assembly is set to convene on Oct. 1, where the bill will face a floor vote. State Senate President Pro Tempore Mike McGuire has stated his chamber will convene if the Assembly passes the bill.
California Governor Gavin Newsom favors the legislation, although the governors of Arizona and Nevada have publicly pushed back, citing concerns it could affect downstream markets.
In a lengthy session this afternoon, lawmakers grilled a panel of expert witnesses comprised of representatives from both regulatory agencies and the fuel industry.
Speaking to the committee, Milder explained that fuel price spikes are caused by both planned and unplanned refinery maintenance which usually takes place during the late summer months. The resulting shortage drives prices up — a situation he believes can be alleviated by requiring refineries to store fuel for just such an occasion.
Joe Patterson, a Fresno Republican, questioned if these requirements on refineries would work in California, acknowledging that “these requirements may exist elsewhere,” but that the market conditions in the state were “very different.”
Others, like Rick Chavez Zbur, asked for even more time and information, requesting an informational hearing at some point in the future ahead of the bill’s final adoption.
Afterward, Minority Leader and Assemblymember James Gallagher, a Yuba City Republican, put another gas price bill before the committee. Assembly Bill 3, authored by Gallagher, would remove transportation fuels from the state’s cap-and-trade program. If passed, the bill could reduce the price of gas by 30 to 35 cents per gallon.
“I think the focus is on the wrong thing. We’re trying to avoid spikes, but the price is already too damn high!” said Gallagher.
Gallagher went on to say that if passed, his bill would provide immediate relief to Californians where AB 1 could take much longer.
“So here’s the deal. How about we pass them both and see what happens?” he asked raising his hands in a shrug. “Let’s see whose idea actually lowers gas prices. I put that challenge to you today.”
Gallagher’s bill ultimately did not move forward with a vote of two in favor and twelve against.